Sheffield City Council has so far short-listed Capita and Fujitsu for major IT contracts.
Sheffield City Council began the process to select a new IT partner or partners last summer.
The contract work will cover areas including human resources, business transformation, property management and facilities management.
For services currently being delivered by existing suppliers, including revenue and benefits, information communication technology, financial business processing and payroll, with the addition of elements of human resources, the final shortlist consists of Capita Business Services and Fujitsu Services.
No decision has been made yet on the shortlist for property and facilities management services.
Laraine Manley, director of corporate resources at Sheffield City Council, said, "We have been encouraged by bidder submissions to date and look forward to further discussions with the shortlisted bidders in the next stage of the procurement process."
The final contracts are expected to be awarded before the end of the year.